The recent release of the Brazil Scenarios Sketch, based around the Shell Energy Security Scenarios, highlights the role that land-use change could play for Brazil to achieve two important outcomes; reaching net-zero CO2 emissions within its domestic economy and becoming an important supplier of carbon removal units into the global economy as the world strives to balance carbon emissions and reach net-zero. In fact, these two outcomes are inextricably linked. The CO2 emissions starting point from Bazil is shown in the illustration below, with land-use change being the largest component of the ..read more

As the world strives to get to net-zero emissions, Brazil can play a formidable role in helping to enable such an outcome, but it won’t happen without the broad recognition of carbon removal credits and a trading capacity to shift the credits between countries. I have recently been in Rio de Janiero, Sao Paulo and Brasilia participating in the launch of a new analysis by the Shell scenario team that is focused on Brazil and looks in depth at the energy transition in the country, but also the enormous potential for managing carbon dioxide on a scale that is globally relevant. That analysis or c ..read more

In a time when there is much being written about limiting warming to 1.5°C, the so-called normative scenario has come of age. These emerge from a class of scenario analysis where a principal outcome is predetermined, rather than the traditional exploratory scenario which finds an outcome as a result of applied societal and geopolitical trends. In the case of 1.5°C scenario analysis, the story-line and findings are determined by the need to achieve net-zero emissions by 2050 and to limit cumulative CO2 emissions to some specified amount, which is the 1.5°C carbon budget. A further constraint is ..read more

In the past week, a story published by the Financial Times based on a report from Greenpeace claimed, inaccurately, that Shell had benefited from selling “millions” of Canadian carbon credits that were not traceable to a direct emission reduction. In fact, the carbon credits in question come from the gold standard for managing CO2 emissions, a carbon capture and geological storage project (CCS). There is a story to be told about this, but it isn’t the one you’d have read in this weekend’s article. It’s also a story that involves me. The story dates back to the early 2010s as Shell (and its JV ..read more

Just a year ago the scenarios team in Shell published The Energy Security Scenarios, a look at the world through the dual lenses of climate change and rising security concerns. Today, the two scenarios seem more prescient than ever as ongoing events continue to reinforce these two very separate directions of travel. The two scenarios are Sky 2050 and Archipelagos. Both start with the realities of the 2020s, meaning that the energy system and future energy policy landscape are showing real signs of change, but also recognising that there is little in place on the scale required to reduce emissi ..read more

I was fortunate to be in Brazil recently and as part of the trip I visited the offices of Carbonext1 in São Paulo, one of the leading companies in the voluntary carbon market space, in this case currently focused on avoided deforestation projects. They are engaged in projects that, in total, are conserving between 1.5 and 2 million hectares of Amazon rainforest. The rainforest itself covers an area of some 670 million hectares, but much of this land isn’t necessarily under immediate threat. Rather, the strategic focus of the company is along the southern border of the rainforest, in effect cre ..read more

On February 6th the European Commission published its Communication and Impact Assessment (IA) for a 2040 Climate Target for the EU, recommending a net greenhouse gas (GHG) emissions target of 90% against a 1990 baseline. According to the IA, this means less than 850 MtCO2-eq of GHG emissions remaining in 2040. Scenario analysis provides a useful mechanism for looking at such future goals, so this discussion is in part framed around the EU data in our two Energy Security Scenario stories, Archipelagos and Sky 2050. These are stories that are full of technology and innovation, with rapid c ..read more

From the perspective of the UAE Consensus and the progress made on Loss and Damage, the COP process is very much alive and the UAE Presidency should be congratulated on all that they managed to achieve. But if you are a keen follower of progress on Article 6 of the Paris Agreement, a vibrant living and developing process was hard to see. In this post, my colleague Malek Al-Chalabi discusses COP 28 from the perspective of the Article 6 negotiations. Malek co-Chairs the International Working Group within the International Emissions Trading Association and is the Senior Carbon Pricing Policy Advi ..read more

I recently attended an emission trading conference in Paris and like many such events in the EU now, one of the first items on the agenda (and in this case it was the first) was a presentation and discussion on the US Inflation Reduction Act (IRA). The fact that the IRA isn’t an emissions trading system didn’t matter. The IRA has upended the climate discussion in the EU in that projects are happening in the US, and change is underway, while a key green technology sector like the EU wind industry is facing headwinds. After years of attempting to implement carbon pricing but finding it to be pol ..read more

Many years ago the well know economist Milton Friedman made a short film about pencils that continues to resonate today. While the film can be interpreted as simply a defence for capitalism, which Friedman was famous for defending, it nevertheless does make a good point about the complexity of the world we live in. The manufacture of an item as simple as a pencil requires such a wide range of resources, skills, machines and knowledge that no one person could easily craft a pencil as refined as the product we can buy for not very much money in a local shop or online. The steps to make a pencil ..read more